Legal Question in Wills and Trusts in Florida
What deed would we use a Quit claim deed or a Life estate deed?
My Mother-in-Law is going to deed the house to my husband. We live with my mother-in-law in the house and we have agreed to live there with her until she passes away this was a promise my husband gave to his father (to take care of his mother she is 72 years old) She is going to deed the house to my husband so that we can put a mortgage on the house to do some major house repairs. We were told of the life estate deed and then we were told of the quit claim deed which is best for our situation for a loan and so that we can aviod probate of an estate when she passes.
2 Answers from Attorneys
Re: What deed would we use a Quit claim deed or a Life estate deed?
You really should consider other options altogether. There are two problems with her gifting the house to you: The first is that you lose a stepped up tax basis in the property, so when you sell you will have capital gains to be taxed on. The second, is that should your mother-in-law need to be placed in a nursing home, you start a look back period which needs to run out before she could apply for and be accepted into the medicaid institutional care program (the state pays for the nursing home). I realize from your question that nursing home care is not what any one wants, but you should be aware of the risk.
Re: What deed would we use a Quit claim deed or a Life estate deed?
A quitclaim deed would gift the house to you. There may be gift tax consequences. A life estate deed (where she has the life estate) usually complicates getting a loan. You might consider a joint tenancy with right of survivorship so that the property passes upon her death. There are medicaid issue to consider in this transaction as well. Unless the house is a "shack" and worth very little, you would benefit from seeing a lawyer about the best way to accomplish your (and her) goals.
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